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Market Sentiment Around Loss-Making Orion Energy Systems, Inc (NASDAQ:OESX)

Simply Wall St

Orion Energy Systems, Inc’s (NASDAQ:OESX): Orion Energy Systems, Inc. researches, designs, develops, manufactures, implements, markets, and sells energy management systems for the commercial office and retail, area lighting, and industrial markets in North America. With the latest financial year loss of -US$13.1m and a trailing-twelve month of -US$7.3m, the US$30m market-cap alleviates its loss by moving closer towards its target of breakeven. The most pressing concern for investors is OESX’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for OESX.

View our latest analysis for Orion Energy Systems

According to the 3 industry analysts covering OESX, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$4.0m in 2021. So, OESX is predicted to breakeven approximately 2 years from today. How fast will OESX have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 70% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, OESX may become profitable much later than analysts predict.

NasdaqCM:OESX Past and Future Earnings, March 7th 2019

I’m not going to go through company-specific developments for OESX given that this is a high-level summary, but, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that OESX has managed its capital judiciously, with debt making up 19% of equity. This means that OESX has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of OESX to cover in one brief article, but the key fundamentals for the company can all be found in one place – OESX’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should further examine:

  1. Historical Track Record: What has OESX’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Orion Energy Systems’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.